GM sees Cadillac near U.S. luxury car market top soon

August 28, 2012|Ben Klayman | Reuters

(REBECCA COOK, REUTERS)

BIRMINGHAM, Michigan (Reuters) - General Motors Co's top Cadillac executive said the brand should be challenging foreign automakers for the top spot in U.S. luxury auto sales in two years, a position it has not held in 15 years.

Don Butler, vice president of marketing for Cadillac, told reporters on Tuesday that sales for the brand should be double what they were in 2010 "within a couple of years" as it rolls out cars in segments where it has not competed for a long time.

"It's my goal that we are slugging it out in the right way for No. 1 in the U.S. within a few years," he told reporters on Tuesday. "Why not? We've been there before."

GM has said that it intends to build Cadillac into a global brand. Cadillac's U.S. sales in 2010 were about 147,000 vehicles. The last time Cadillac was the U.S. luxury sales leader was in 1997, when it sold 182,624 vehicles.

Butler emphasized seizing the top spot was a goal that would result from executing on rolling out new and redesigned vehicles that it has in the pipeline.

Cadillac's current vehicle lineup, which serves about half the existing luxury market, are in the top three in sales in each of its product segments. The addition of the XTS and ATS cars will push the share of the segments the brand hits to 80 percent and GM is eyeing other vehicles to push that even higher.

"We've got a 10-year plan for what we need to do with the brand here in the U.S., in China, in Europe, markets like the Middle East and Russia," Butler said.

U.S. sales of GM's luxury brand rose 3.7 percent in 2011 to about 153,000, or 63 percent of the sales of luxury leader BMW .

Through July this year, Cadillac U.S. sales were down 12.6 percent from a year earlier to 76,229, according to Autodata Corp.

GM expects to boost sales in large part due to the appeal of its soon-to-be-introduced ATS model, which will be Cadillac's smallest and least expensive model. GM sees the ATS as a challenger to BMW's 3-Series and the Mercedes-Benz C-class cars.

"If I had told you five years ago that we will develop a vehicle that will be spoken of in the same breath as the BMW 3-Series, you probably would have been very skeptical," Butler said.

"We are really excited about what this vehicle means in the marketplace because it allows us to participate in a segment we haven't been able to up to this point," he added.

The ATS is Cadillac's first attempt at making a small luxury car since its Cimarron in the 1980s that Time magazine in 2007 called one of the 50-worst cars ever built. The ATS will begin hitting U.S. dealers in the next few days with a starting price of almost $34,000.

GM has lacked a small luxury car in recent years -- a segment that accounts for 60 percent of the luxury market and one that attracts younger buyers.

The ATS is one of 10 all-new or significantly refreshed products that Cadillac will introduce globally in the next three years, Butler said.

GM previously said it will make the ELR luxury electric coupe next year. It also has plans for major design upgrades to its CTS car and Escalade SUV. He declined to identify other new vehicles Cadillac could add to its lineup.

GM introduced the Cadillac XTS sedan in June and sold 1,739 in the United States last month. Officials expect XTS sales in the U.S. market to be near or above 2,000 in August.

In 2011, German carmakers led the lucrative U.S. luxury market after Toyota Motor Corp's Lexus brand had been champion for 11 straight years.

BMW took the top spot last year at about 248,000 in sales, followed closely by Daimler AG's Mercedes brand. Lexus was third.

Through July this year, Mercedes held the U.S. sales lead at 159,412, followed by BMW at 147,801 and Lexus at 126,367.

Cadillac's U.S. sales this year of 76,229 have fallen behind Volkswagen AG's Audi brand, which through July reported U.S. sales of 76,865.